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        The politics of drinking

           
March 24, 2014


 

 

After the Budget: the forward march of temperance halted?

I resisted the urge before the Budget to make a call on whether the chancellor would cancel the duty escalator for all alcohol. When he did it for beer last year it was a huge surprise, and despite what I said at the time I thought it might be tougher for him to do it for harder liquor.

The successful campaign around beer tugged at the sentimental strings politicians have for the pub. It was easy to argue there is an organic link between the two. Help beer and you help pubs.

Indeed, it was important to keep wines and spirits out of it. During the parliamentary debate triggered by the 100,000 signature petition to end the beer duty escalator a chap at the back kept jumping up and trying to make the case for scotch whisky. He was repeatedly shouted down for fear of ruining everything.

Shrewdly, the Wine & Spirit Trade Association, in the latter days of its own duty campaign this year, thrust to the forefront research that suggested that wines and spirits were of increasing importance to pubs.

Whether that convinced the Chancellor or not, it seems he took little notice of a concerted effort by the forces of medical temperance to stop him scrapping the escalator.They were, perhaps, a little late to the battlefield. Until a couple of weeks ago they paid scant interest to duty rates. The public health case, for instance, was absent from last year's parliamentary debate.

For a few years now, medical temperance has put nearly all its eggs into the minimum unit pricing basket, and the strategy was working. MUP's inclusion in the Government's Alcohol Strategy two years ago suggested the coalition was willing to make a historically significant intervention in the drinks trade.

Sticking to the plan, the health lobby chose not to take advice from the Institute of Fiscal Studies that tax increases would be more effective than MUP. Now that minimum pricing has been shelved (though hopes are clinging on in Scotland) it looks like they've had second thoughts.

In any case, the government doesn't want to know. With the general election little more than a year away, it seems like aggressive anti-alcohol policies are off the agenda at least until the next administration.

As I've argued, the contradictions involved mean that the state constantly vacillates between the demands of industry and the demands of temperance. For now, it's swinging back the industry's way. Big Alcohol is triumphant and rubbing it in. So I might struggle to reassure the health lobby, here, but I'm going to try.

Last year, when George Osborne took a penny off a pint, a penny did not come off a pint. Us beer drinkers have seen the price continuing to increase. Perhaps it has increased more slowly than it might otherwise have done, but that's not something you actually notice. It doesn't change your behaviour.

While some pubcos have already announced they'll pass on the latest cut to their tenants it won't be passed on to drinkers. Tenants work on such small margins they need every penny they can get.

Though you might see the odd promotion, it won't affect prices at the checkouts, either. Supermarkets have absorbed duty hikes in the past because they can spread the extra cost around a multitude of other products. The price they buy-in for does not determine the price they sell at.

So George Osborne has not halted the escalator, cut duty on beer and frozen it for cider and spirits to benefit the consumer. That's just the crass spin. The money is for the trade, and though it's not a vast amount once it's shared out, as we saw with the brewers last year it will inject a little more confidence and, the government hopes, encourage investment by making the whole business a touch more profitable.

As for drinkers, the Budget hid a darker purpose. The poorest fifth of the population, that bottom quintile of deprivation that carry the burden of alcohol harm, is worse off, with more cuts to come in the social wage. The British Medical Association got its priorities right in highlighting the 20bn cuts to the NHS above the duty freeze.

While duty rates soared by 42% between 2008 and 2012, living standards fell and continue to fall. The real value of average earnings is down by nearly 14%. Complaints about the affordability of alcohol are looking out of date.



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